Wipro records 18% YoY growth in net income in the quarter

Wipro Limited today announced financial results under International Financial Reporting Standards (IFRS) for its third quarter ended December 31, 2012.

The total revenues were Rs 110.25 billion, an increase of 10% YoY. The net Income was Rs 17.16 billion, an increase of 18% YoY. Non-GAAP adjusted net income was Rs 17.09 billion, an increase of 17% YoY. The IT services revenue was $1,577 million, a sequential increase of 2.4% and YoY increase of 4.8%. The non-GAAP constant currency IT Services revenue in dollar terms was $1,571 million, within our guidance range of $1,560 million to $1,590 million. The IT services revenues in Rupee terms was Rs 86.02 billion, an increase of 13% YoY. The IT Services Earnings Before Interest and Tax (EBIT) was Rs 17.92 billion, an increase of 13% YoY.

The operating income to revenue for IT Services was 20.8% for the quarter, up 0.1% sequentially. Wipro declared an interim dividend of Rs 2 ($0.041) per share /ADS.

“While the overall mood on economic growth continues to be muted, global corporations continue to leverage technology to drive revenues and productivity,” said Azim Premji, Chairman of Wipro.

“We have expanded operating margins sequentially through improvements in revenue productivity and improved cash flow generation through efficient working capital management. We commend and welcome the circular implementing the recommendation of the Rangachary Committee, which has dealt with the tax disputes the industry has been facing over the years,” said Suresh Senapaty, Executive Director & Chief Financial Officer of Wipro.

“We have seen broad based growth in the quarter with all our verticals growing sequentially. Our improvement in customer and employee engagement is reflected in client mining with 10 customers contributing more than $100 million and lower attrition. We continue to make investments in our go to market organization and technology themes to be a strategic partner to our customers,” said T K Kurien, Executive Director & Chief Executive Officer, IT Business.

Outlook for the Quarter ending March 31, 2013

We expect Revenues from our IT Services business to be in the range of $1,585 million to $1,625 million. The Guidance is based on the following exchange rates: GBP/USD at 1.61, Euro/USD at 1.31, AUD/USD at 1.04, USD/INR at 54.65.

The IT Services (78% of Total Revenue and 92% of Operating Income for the quarter ended December 31, 2012).

The IT Services segment had 142,905 employees as of December 31, 2012, an increase of 2,336 people in the quarter. We added 50 new customers for the quarter. Wipro has secured a large R&D Applications and Infrastructure services deal from a Europe-based Telecom Equipment Vendor. IT will be a key enabler in the client’s ongoing business transformation program and this deal was a natural extension of Wipro’s longstanding partnership with the client.

Sears Holdings Corporation, a leading integrated Retailer in the US has extended its agreement with Wipro through a multi-year Business Process Outsourcing contract in the areas of Finance & Accounting, Human Resources and Procurement. Wipro will continue to build on the relationship to deliver results, quality, innovation and flexibility.

Wipro has also won a multi-year IT Infrastructure Outsourcing engagement with one of the largest retailers in Australia. This transformational program, which also involves cloud deployment, will leverage a high degree of automation to improve operational efficiencies. This will help the retailer improve business agility and enhance the end-user experience.

Wipro has won a multi-year engagement with a large not-for-profit Healthcare Provider in the US to enable the seamless integration of the IT infrastructure of its recently acquired entities. The partnership will help the customer leverage new technologies like cloud, analytics, pervasive computing and mobility to deliver and improve the quality of care.

Wipro has won a deal for a Core Banking Solution implementation across 2,520 branches of Punjab and Sind Bank, a public sector bank in India. Wipro will be providing hardware and software, WAN roll-out, network & security devices, datacenter and disaster site co-hosting.